SUMMARYThis paper presents the capacity and average bit error rate (BER)-based performance analysis of a two-way relay-assisted free-space optical communication system, over an atmospheric turbulent channel modeled by the Gamma-Gamma distribution and also affected by path loss and misalignment errors. A half-duplex, decode-and-forward, two-way, optical relay is considered, which establishes communication between two terminals, when direct communication is not possible because of non line-of-sight propagation or large distance. For the presented system and channel models and considering heterodyne detection at the receiver, we formulate the statistics of the instantaneous signal-to-noise ratio, followed by calculation of exact analytical expressions of capacity and BER. The mathematical expressions are formulated in terms of easily computable Meijer's G-function. This mathematical analysis is accompanied with several numerical examples to illustrate the effect of the key system parameters.